On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $35,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of years 1,2,3, and 4 ), and the present value of the five annual lease payments is $153,552, based on a 7% interest rate. 1. Prepare the January 1 journal entry Harbor records at inception of the lease for any asset or liability. 2. Prepare the January 1 entry Harbor records for the first $35,000 cash lease payment. 3. If the leased asset has a five-year useful life with no salvage value, prepare the December 31 journal entry Harbor records each year for amortization of the leased asset. Journal entry worksheet